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CIRCULAR

Guiding the implementation of the new urban center Regulation promulgated together with the Government's Decree no. 02/2006/ND-CP of January 5, 2006

Pursuant to the Government's Decree No. 36/2003/ND-CP of April 4, 2003, defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government's Decree No. 02/2006/ND-CP of January 5, 2006, on the implementation of the New Urban Center Regulation;

The Ministry of Construction hereby guides the implementation of a number of contents of the New Urban Center Regulation promulgated together with the Government's Decree No. 02/2006/ND-CP of January 5, 2006 (hereinafter referred to as Decree 02/CP for short), as follows:

I. A number of contents on the order of forming and developing new urban centers (hereinafter abbreviated to NUC) specified in Article 6 of Decree No. 02/CP:

1. On the urban construction detailed plannings defined at Point a, Clause 1, Article 6:

a/ Based on the urban construction general plannings already approved by competent authorities, provincial/municipal Construction Services or Planning-Architecture Services (for provinces and cities where exist the Planning ' Architecture Services) shall have to organize the elaboration and appraisal of the blueprints of urban construction detailed plannings of 1/2,000 scale in areas where exist NUC projects and submit them to provincial-level People's Committees for approval.

b/ The approved urban construction detailed plannings of 1/2,000 scale shall serve as a basis for formation and development of NUC projects.

2. On the elaboration of detailed construction plannings of 1/500 scale and the formation of NUC projects, provided for at Point b, Clause 1 of Article 6:

a/ Based on the approved urban construction detailed plannings of 1/2,000 scale, NUC project investors (already selected through bidding or constructor designation) shall have to elaborate the construction detailed plannings of 1/500 scale and submit them to competent bodies for approval under the decentralization by provincial-level People's Committees.

b/ Depending on the project size and capabilities of local construction management bodies, provincial-level People's Committees shall decentralize the approval of construction detailed plannings of 1/500 scale of NUC projects to district-level People's Committees.

In cases where upon the elaboration of construction detailed plannings of 1/500 scale, investors propose adjustments to the construction detailed plannings of 1/2,000 scale, aiming to bring about higher efficiency to projects without affecting landscape and the environment, the investors and the appraisal bodies may reach agreement before submitting them to competent bodies for consideration and approval.

c/ Based on the approved construction detailed planning of 1/500 scale, NUC project investors shall have to form NUC projects according to the provisions of Section III of this Circular and submit them to provincial-level People's Committees for organization of appraisal and permission of investment or for appraisal and submission to the Prime Minister for consideration and permission of investment according to the decentralization specified in Article 15 of Decree No. 02/CP.

In cases where upon the formation of NUC projects, investors propose adjustments to the construction detailed plannings of 1/500 scale, aiming to bring about higher efficiency to projects without affecting the architecture, landscape, environment and connection with technical infrastructure, the investors and the appraisal bodies may reach agreement before submitting them to competent bodies for consideration and permission of investment.

3. On grade-2 projects defined in Clause 2, Article 6:

a/ NUC project investors may call on grade-2 investors to make construction investment in NUC projects after the completion of technical infrastructure satisfying the conditions to service the construction and operation of grade-2 projects.

NUC project investors may give priority to grade-2 investors (including those of public projects invested by the State) that can deploy the projects soon and execute the projects at a quick speed, with a view to early achieving the objective of full coverage of the NUC project grounds.

b/ After NUC projects are approved, grade-2 projects (including works invested by grade-1 investors and public works invested by the State) of group-A scale, which are invested in the NUC projects and comply with the approved construction detailed plannings of 1/500 scale, these projects' investors shall not have to carry out procedures to apply for investment permission but only have to send the base designs to competent state bodies according to current regulations on construction for appraisal before approving the projects.

II. On NUC project investors defined in Article 11 of Decree No. 02/CP:

1. On investment capital owned by investors participating in NUC projects defined at Point b, Clause 1 of Article 11:

a/ Investment capital of investors means the investors' actual capital by the latest year, which is determined through the enterprises' financial statements enclosed with tax finalizations or auditing reports. For newly-set up enterprises, the banks' certification of their financial capability is required.

b/ The NUC total investment shall be projected according to current regulations, including expenses for land use or land rent; expenses for ground clearance compensation; resettlement supports (if any); expenses for construction of technical infrastructures inside the fences (including traffic systems, water supply and drainage systems; daily-life electricity supply systems, public-lighting systems, excluding State-invested works running through the NUCs) for the whole projects.

2. On the modes of selecting NUC project investors, provided for in Clause 2, Article 11:

2.1. In case of bidding for selection of NUC project investors:

2.1.1. Conditions for organization of biddings:

The organization of biddings to select investors for execution of NUC projects shall be carried out only when the construction detailed plannings of 1/2,000 scale have been approved and the following conditions are met:

a/ The project land area is identified in the approved construction plannings.

b/ The bid solicitor has been identified and the bidding dossier has been approved by the provincial-level People's Committee.

c/ The land use floor price has been approved by the provincial-level People's Committee, in case the project land area has been compensated and ground-cleared.

d/ The scheme on compensations, ground clearance and resettlement has been approved by the provincial-level People's Committee, in case the project land area has not yet been compensated and ground-cleared.

2.1.2. Bid solicitors:

a/ The president of the provincial-level People's Committee shall assign the Construction Service or the administration of the urban center under the province to act as bid solicitor (in case of non-establishment of an NUC development management board) for organizing biddings to select NUC project investors.

b/ The bid solicitor shall propose the provincial-level People's Committee to decide on setting up assisting a specialists' group. The specialists' group shall be composed of representatives of the Construction Service, Natural Resource and Environment Service, Planning and Investment Service, Finance Service, Planning-Architecture Service (for cities where exist Planning-Architecture Service) and of other agencies involved in the projects.

2.1.3. Order of organizing biddings:

A bidding for selection of NUC project investors shall be organized in the following order:

a/ Elaborating a bidding plan.

b/ Compiling the bidding dossier.

c/ Organizing the bidding.

d/ Evaluating bids.

e/ Appraising and submitting the bidding results for approval.

2.1.4. Provisions on the time of organizing biddings:

a/ The time for notifying a bid invitation shall be at least 10 working days before the distribution of the bidding dossier.

b/ The time for bid preparation shall be at least 45 working days after the distribution of the bidding dossier.

c/ The valid time of bids is specified in the bidding dossier, which shall not exceed 180 working days after the bidding closure stated in the bidding dossier. In case of necessity, the bid solicitor may request the extension of the valid time of bids for not more than 30 working days and with the approval of the provincial-level People's Committee.

d/ The time for bid evaluation shall be 45 working days at most from the date the bidding is closed to the date the bid solicitor submits the report on bidding results to the provincial-level People's Committee for approval.

2.1.5. Bidding plans:

The bid solicitor shall draw up a bidding plan and submit it to the provincial-level People's Committee for approval. A bidding plan shall indicate the contents, time and form of bidding.

2.1.6. Bidding dossiers:

Based on the approved bidding plan, the bid solicitor shall compile a bidding dossier and submit it to the provincial-level People's Committee for approval. The contents of a bidding dossier shall cover two sections:

a/ Necessary information and instructions for investors:

- The project location.

- The project size, boundary and land area.

- The characteristics of the project ground: Terrain, geology, current status of the land plot.

- The construction detailed planning of 1/2,000 on the project land area.

- Information on investment in construction of infrastructures inside and outside the project fence.

- Where ground clearance has been carried out for the project land area, the information on initial land use levies must be supplied, including land use levies according to the price bracket set by the provincial-level People's Committee, ground clearance expenses and technical infrastructure construction expenses (if any).

- Other necessary instructions on the quantity and specifications of bids, the valid time of bids and requirements on bid guarantee.

- The prerequisites for bid rejection: Bids are submitted not on schedule set in the bidding dossier; the bid guarantee, the validity and legality of bids; financial capability; bid offers (in cases where the project land area has been ground-cleared) and other prerequisites.

- Criteria for bid evaluation.

b/ Investors' declarations and proposals on:

- The financial capability and capital mobilization plan.

- The system of project-managing organization, experience in project execution.

- The project execution schedule.

- Plans on management of NUC during and after the investment.

- Requirements on construction of technical infrastructure, social infrastructure and dwelling houses including those for policy beneficiaries and low-income earners.

- Requirements on investors' obligations and contributions to the State.

- The land use levy bid prices for cases where the ground clearance has been made for, or technical infrastructure has been built on, the project land areas (if any).

- Plans on ground clearance compensation, resettlement supports in cases where ground clearance has not yet been carried out for the project land area.

- Preliminary proposals on the construction detailed planning of 1/500 scale, aiming to bring about investment efficiency for the State and investors.

- Other proposals of investors (if any).

2.1.7. Bid invitation letters or bidding notification:

After the bidding dossier is approved, the bid solicitor shall widely notify the bid solicitation on the mass media (for open bidding) or send bid invitation letters directly to investors (for restricted bidding). The contents of bidding invitation shall comply with the form set in Appendix 1 to this Circular (not printed herein).

2.1.8. Bids

A bid shall comprise an application for participation in bidding, made according to the form set in Appendix 2 to this Circular (not printed herein), relevant legal documents, the investor's proposals as requested by the bidding dossier and other proposals.

2.1.9. Bid guarantee

Depending on the size and characteristics of each NUC project, the provincial-level People's Committee shall set an appropriate bid guarantee level which, however, shall not exceed 3% of the land use levy for the project area.

Bid guarantee shall be made according to the form set in Appendix 3 to this Circular (not printed herein).

2.1.10. Bid evaluation

The evaluation of bids shall be based on the evaluation criteria and conditions stated in the bidding dossier and be determined according to a mark scale (including the criteria on bid prices offered for land use levies, in cases where ground clearance has been carried out for the project land area). Depending on the size and characteristics of projects, the provincial-level People's Committee shall set the mark scale for each of the following criteria:

a/ In cases where ground clearance has not been carried out for the project land area:

- Evaluation of the capability and project management experience of investors.

- Evaluation of the declared contents as required in the bidding dossier and proposals of investors.

- Evaluation of investors' proposals on the construction detailed planning of 1/500 scale and other proposals which bring about efficiency for the project, and contributions to the State.

b/ In cases where ground clearance has been carried out for the project land area:

- Evaluation of the contents mentioned at Point a of this Section.

- Evaluation of bid prices offered for land use levies, ground clearance expenses, investments in construction of technical infrastructure (if any).

c/ The investor who gets the highest mark shall be invited to negotiations.

d/ In cases where negotiations fail, the bid solicitor shall invite the investor with the immediate lower aggregate mark to negotiations until a bid-winning investor is selected.

2.1.11. Appraisal, approval of bidding results:

a/ The specialists' group shall make a report on bid examination and send it to the bid solicitor for appraisal and submission to the provincial-level People's Committee for consideration and approval.

b/ After the bidding results are approved, the bid solicitor shall publicize the bidding results and have to settle complaints (if any).

2.2. In case of designation of NUC project investors:

2.2.1. Conditions for application of the mode of designation of contractors:

The application of the mode of designation of NUC project investors shall be decided by the provincial-level People's Committee, in cases where NUC projects must be quickly executed to meet local housing development requirements.

2.2.2. Implementation order

a/ The bid solicitor directly invites the investor with full capability and experience suitable to the project requirements.

b/ The bid solicitor supplies the investor with its requirements for the latter to use as a basis for compilation of a proposal dossier.

c/ The investor submits the proposal dossier within the required time limit for the bid solicitor to appraise and submit it to the provincial-level People's Committee to decide on recognition of the investor.

2.2.3. Bid solicitors

The bid solicitor and the assisting specialists' group shall be identified under the provisions of Point 2.1.2, Section II of this Circular.

2.2.4. Contents of the bid solicitor's requirement dossier:

A requirement dossier shall cover 2 sections:

a/ Information and instructions on the NUC project:

- The dossier of the construction detailed planning of 1/2,000 scale of the project area.

- Information on the current status of the land area, including documents on natural conditions and other conditions related to the project.

b/ Investor's declarations and proposals on:

- The scheme on the construction detailed planning of 1/500 scale.

- The scheme on ground clearance compensation, resettlement supports (if any).

- The project execution schedule.

- Requirements on the construction of technical infrastructure, social infrastructure, dwelling houses including those for policy beneficiaries and low-income earners.

- Requirements on the investor's obligations, and contributions to the State.

- Requirements on financial capability, capital mobilization for project execution.

- Schemes on NUC management during and after the investment.

- Other requirements on the investor (if any).

2.2.5. Investors' proposal dossiers:

The proposal dossier shall be compiled by the investor, comprising an application for participation in bidding, relevant legal documents, proposal on the scheme on the construction detailed planning of 1/500 scale and other proposals made according to the contents of the requirement dossier of the bid solicitor.

2.2.6. Appraisal of proposal dossiers and approval of investors:

a/ The specialists' group shall have to examine and evaluate the proposal dossier of the investor according to the following contents:

- The blueprint of the construction detailed planning of 1/500 scale, proposed by the investor with the approved construction detailed planning of 1/2,000 scale, regarding the position, boundaries and size of functional quarters; criteria on density, land use coefficients, construction foundation level, red-line demarcation; construction demarcation; technical requirements; the connection of technical infrastructure inside and outside the project fence; the harmony of landscape and architecture with the area.

- The proposal dossier's compatibility with the requirements of the bid solicitor.

b/ The specialists' group shall sum up the results of examination of the proposal dossier of the investor, clarifying the satisfactory contents and those to be negotiated.

c/ In case the blueprint of the construction detailed planning of 1/500 scale, elaborated by the investor, contains proposed adjustments to the construction detailed planning of 1/2,000 scale, aiming to bring about efficiency for the project, the specialists' group must acknowledge them for negotiations and must not impose conditions which cause harms to the investor.

d/ The bid solicitor shall invite the investor to negotiations. The negotiation contents must be recorded in a minutes, clearly stating the agreed contents and the contents to be amended and adjusted by the investor in relation to the planning and proposals of the investor. The minutes shall be submitted to the provincial-level People's Committee for approval and recognition of the NUC project investor.

Where no agreement can be reached after negotiations, the bid solicitor shall report such to the provincial-level People's Committees for considering and deciding on the designation of another investor.

III. On the formulation of NUC investment projects provided for in Clause 2, Article 13 of Decree No. 02/CP:

The contents of an NUC project include an explanation section and a base design

1. The explanation section

a/ The investment necessity and legal bases of the project.

b/ The investor, investment form, project management mode.

c/ The project land area, boundaries, plan on ground clearance and resettlement.

d/ Mode of land assignment, transfer, lease.

e/ The project size.

f/ Econo-technical explanations, projected socio-economic benefits.

g/ Investment and business phases; capital sources, implementation schedule and measures to be implemented in each phase.

h/ The scheme on the provision of services and urban services invested under the NUC project in the process of investment and business and post-business activities.

i/ Preliminarily projected total investment of the project.

j/ Requirements on the part of the State regarding investment in the construction of technical infrastructure outside the fence and the State's technical infrastructure running through the project, investment in social infrastructure and offices of administrative bodies.

k/ Technical infrastructure and social infrastructure, which are transferred without compensations.

l/ Tasks and responsibilities of, and the relationship between, the NUC project investor and relevant entities.

m/ Proposals on supports and preferences for the project.

n/ Proposals on administrative management, new administrative unit and the scheme on transfer of administrative management to the local administration.

2. The base design:

a/ The base design shall be drawn up for the system of technical infrastructure of the project.

b/ The approved construction detailed planning of 1/500 scale shall serve as the basis for drawing up the base design of the project.

IV. On NUC project dossiers of application for investment permits, defined in Article 14 of Decree No. 02/CP:

A project dossier shall comprise:

a/ The application for investment permit, made according to the form set in Appendix 4 to this Circular (not printed herein).

b/ The decision approving the result of selection of the NUC project investor, issued by the provincial-level People's Committee.

c/ The approved construction detailed planning of 1/500 scale.

d/ The NUC investment project as guided in Section III of this Circular.

V. On appraisal of projects and decisions to permit investment, provided for in Article 15 of Decree 02/CP:

1. The provincial-level People's Committee shall assign the provincial/municipal Construction Service (in case of non-establishment of NUC development management boards) to act as the principal body for organizing the project appraisal, having the responsibility to gather written comments of the urban administration of the locality where the NUC project is located and relevant agencies and sum them up in a report to be sent to the provincial-level People's Committee for submission to the Prime Minister for consideration and permission of investment with regard to NUC projects using 200 ha of land or more or for the provincial-level People's Committee to consider and decide on investment permission with regard to the remaining NUC projects, including population quarter projects other than NUC projects.

a/ The appraised project contents must satisfy the requirements specified in Clause 1, Article 13 of Decree No. 02/CP and the commitments made in the course of negotiations on selection of investors.

b/ Appraisal of base designs:

The contents of appraisal and reports on results of appraisal of base designs shall comply with current legal provisions on construction.

- For NUC projects with investment decided by provincial-level People's Committees, the appraisal of their base designs shall be organized by provincial/municipal Construction Services.

- For NUC projects with investment decided by the Prime Minister, the appraisal of their base designs shall be organized by the Construction Ministry.

2. Provincial/municipal Construction Services shall make reports on NUC project appraisal results and submit them to provincial-level People's Committees for consideration and permission of investment or for submission to the Prime Minister for consideration and permission of investment.

A project appraisal result report shall include the following contents:

a/ Summary of major contents of the project as provided for in Clause 3, Article 15 of Decree No. 02/CP.

b/ The realization of commitments stated in the minutes of negotiations on selection of the investor.

c/ A sum-up of comments made by agencies, remarks and proposals.

d/ The report on the results of appraisal of the base design and comments of relevant bodies.

VI. On management of work construction quality provided for in Article 5 of Decree No. 02/CP:

1. Responsibility for work construction quality provided for in Clause 1 of Article 5:

a/ Investors shall have to organize the apparatus systems to manage the work construction quality under the provisions of law on construction with regard to works under the NUC projects they have invested in.

b/ Depending on the contents of contracts between NUC project investors (grade-1 investors) and secondary investors, the NUC project investors shall have to inspect the quality management of the construction of works under the investment projects of secondary investors.

2. Participation in quality management and test and acceptance of works, for to be-transferred works specified in Clause 3 of Article 5:

For technical infrastructure, social infrastructure and other works identified in decisions permitting the investment and are to be transferred to local professional organizations for management and operation, the transferees may inspect the contractors' performance throughout the course of construction and may also participate in the test and acceptance of completed works to be transferred to them.

VII. On work warranty, maintenance provided for in Article 5 and Article 19 of Decree No. 02/CP:

1. Work warranty provided for in Clause 4 of Article 5 and Clause 1 of Article 19:

a/ Construction contractors shall have to provide warranty for works they have constructed within the time agreed with the NUC project investors or secondary investors under contracts and legal provisions on construction.

b/ NUC project investors shall have to provide work warranty for transferees within the period agreed upon by the two parties in the transfer minutes, which shall not be shorter than 12 months as from the date of transfer.

c/ Investors shall have to provide warranty for condominiums and residential houses in NUC, which they have made the construction investment in, for purchasers of apartments or residential houses within the period agreed upon by the two parties in the trading contracts, which shall not be shorter than 12 months as from the date of sale.

Other provisions on work warranty such as warranty liability, warranty money levels,' shall comply with the provisions of law on construction and relevant laws.

2. Work maintenance provided for in Clause 3 of Article 5:

a/ NUC management boards set up by NUC project investors shall have to organize the maintenance of works they have managed and used under current regulations on work maintenance; for condominiums, the maintenance must also comply with the provisions of law on housing.

b/ The work transferee-managers and users shall have to perform the work maintenance according to the provisions of law on construction.

VIII. On mobilization of capital for construction of residential houses, provided for in Clause 2, Article 23 of Decree No. 02/ND:

1. The mobilization of capital for investment in construction of residential houses in NUC projects shall be carried out many times through contracts between sellers and buyers; the first mobilization may be conducted only when investors have completed the ground clearance and started building the technical infrastructure according to the investment phases determined in investment permission decisions. Subsequent mobilizations shall comply with the construction investment progress, ensuring that the total mobilized capital amount shall not exceed 70% of the contractual value.

2. Investors must use for proper purposes the money mobilized from buyers. The rights and obligations of the sellers and buyers shall be expressed in written contracts.

IX. Transitional handling:

1. For investors assigned by provincial-level People's Committees to elaborate detailed plannings on NUC construction projects or to carry out ground clearance before the effective date of Decree No. 02/CP, provincial-level People's Committees shall continue to assign them to act as NUC project investors without having to organize biddings to select NUC project investors as provided for by Decree No. 02/CP. NUC project investors shall have to organize the formulation of projects to be submitted for investment permission according to Decree No. 02/CP and the guidance in this Circular.

2. For unfinished projects, if NUC project investors deem it necessary to readjust a number of previous provisions to comply with the provisions of Decree No. 02/CP, they may propose such to the provincial-level People's Committees of the localities where exist the projects for consideration and approval.

This Circular shall take effect 15 days after its publication in "CONG BAO." In the course of implementation, agencies, organizations and individuals shall report any arising problems to the Ministry of Construction for consideration and settlement.